Ford Scion Has a Better Idea: Turning to Startups for Tech Development

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Ford Chairman William C. Ford II has been a trailblazer throughout the years of his stewardship of Ford Motor Co. Among other things, he hacked out an early “green” trail for Detroit Three auto makers with hybrid vehicles and brought in a “non-car” guy in Alan Mulally to take over as Ford CEO in 2006, after Ford saw that his own capabilities as CEO might be limited.

Now Ford has begun to stake out a pioneering position for his family’s company in another area: working with technology startups that might be able to help the auto maker get some headway in digital arenas that increasingly are differentiators in an industry whose products are becoming as much computers as they are mechanical machines.

“Traditionally our industry has not worked well with smaller companies,” Ford said at a forum this week during the Intelligent Transport Systems World Congress in Detroit, according to Automotive News. Ford Motor needs “a shift in our company in terms of how we interact with this new world.”[more]

In doing so, Ford might borrow a page from another industry: CPGs. Many large consumer-packaged-goods brands—ranging from PepsiCo to Mondelez—have launched initiatives under which they attempt to attract startups into contests, mentoring relationships or partnerships so that they acquire an edge in apps, social media promotions and other areas of marketing through ideas hatched by the small companies, increasingly run by crops of enterprising twenty-somethings. 

This practice has been much more limited in the auto industry. Lexus is one of the few brands to have tried anything like that, and on a limited basis, while Ford itself opened up a lab in Silicon Valley in 2012 in order to utilize big data to inform marketing and design decisions. 

Ford told the forum for automated driving that the company must strike a balance between the technology it invents and what it gets from other companies, according to Automotive News. “We don’t have to be the inventor of this technology,” he said. “What we have to be is a very nimble integrator.”

Areas where Ford might benefit from quick uptake of knowledge, ideas and products from startups include not only automated driving and “driverless” cars but also infotainment and ride-sharing services. While Ford and its industry rivals long have worked through the challenges and opportunities of partnerships with large, established suppliers, it’ll be a new frontier to engage effectively with much, much smaller enterprises that easily could be engulfed by an industrial giant like Ford.

“If we’re really going to be successful as a company,” Ford said, “we have to know how to work with a very young company—not to overload them with requests.”

• Connect with Dale on Twitter: @daledbuss

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